Friday, September 28, 2012

Bad Data, No Problem! Changes and Explanations to Money Daily

In the bizarro-world equity market that prevails post-crash 2008, there's absolutely nothing better than a downward revision to GDP and a horrifying slump in durable orders to spark a one-off rally, and that's exactly what happened on Thursday, when the government (that sage group of geeks working on dilapidated, outdated computers, deciphering information through models long ago discredited and obsolete) decided (one assumes they don't actually crunch numbers, preferring to just "eyeball" the data) that GDP grew not at 1.7% in the second quarter, but actually at 1.3%.

Along with that dreadful assessment of the US economy came another report, this from another government geek gaggle (Census Bureau of the Department of Commerce), showing that durable orders for August fell 13.2% after registering a gain of 4.1% in July.

Notwithstanding that such reports are already ancient history by the time they reach the markets, such a decline - attributed mainly to Boeing, which saw orders fall from over 100 aircraft to one - would have sent markets into a dizzying tailspin in normal times. Being that these times are anything but normal, the insiders rigging the markets for maximum stupidity and ignorance deemed that a small rally was in order, damn the statistics and those annoying government numerological escapades into reality.

Obvious to anyone still in possession of sufficient grey matter between the ears t perform rudimentary cognitive analysis, this market is currently priced for boom times, not sad times, bad times or even moderately glad times, but poised to break out to new all-time highs in short order, presumably before the selection (Does anyone still believe that touch-screen voting computers with no paper trail actually record one's vote accurately?) of our new president, or, in the case that the current spendthrift-in-chief is chosen again, the same president (it's neater that way).

Well, sometimes markets are wrong. Not often, but in the case of blatant manipulation, dismissive of data and control by a select few, they can be way off, as, one might suspect, they are at the current time. How this disconnect with what suffices as reality on Main Street is rectified by Wall Street is for prognosticators and stuffy, beef-fed analysts. It is our contention that they are wrong, and will remain wrong until the Federal Reserve is as bankrupt financially as our congress is morally.

It may take some time, but the Fed's ZIRP and QEternity are certain to promote the progress toward complete insolvency with abundant zeal. Insisting on monetizing almost all government debt and sopping up underwater MBS at par when the true price (ah, price discovery, what a quaint concept) is something of the order of par-minus-some-large-percentage, the Fed is well along a course of self-destructive behavior that will be difficult, if even possible, to unwind.

Dislocations and distortions in just about all markets run rampant and it's only a matter of time before all hell breaks loose and the disjunction becomes a permanent plague on the global stage. Europe is no better, but they're holding the EU together with string and baling wire until, ostensibly, the US elections have passed. Then, they will be allowed to go into what most people would call a "haywire" phase which will make the protest and violent clashes of police and protesters this week look like a serene picnic by a lake.

It is not without some research and dedication to honest (though admittedly slanted) reportage and analysis that the writer/editor of this blog has come to the conclusion that no market can be trusted these days. It has long been suspected that elaborate schemes and rigging and excessive money-printing have delayed a complete unraveling, but now it is certain. Nothing is to be trusted. Not the words from a politician's lips, nor the babbling of baby-faced analysts suggesting that the S&P will exceed 1600 next year or other such pitiful pronouncements can be believed.

In truth, emerging black markets and underground or alternative economies are more trustworthy and honest, flourishing, as a matter of fact. When one trades an ounce of gold, silver or even weed for another tangible object, perhaps land or food, one can be fairly certain a fair deal has been had by both sides. Handshakes are preferred over contracts and disputes are settled the way our forefathers did, with understanding, tolerance and sometimes, force. Courts are the brunt of jukes, providing neither justice nor equitable decisions. Manned by small-minded, overpaid monarchs in robes, they exist as a facade today, a control fraud of the highest order. The judicial system in America has been broken for a long time. Now, when the general public must abide by an ever-changing and increasingly stifling code of behavior under the hubris of "law" and the elite abide only by what suits them, courts serve only those who submit to them, a number that lowers daily.

It is with this understanding of the mess that America has created for itself and congress and Wall Street perpetuate, that this writer has sought refuge in alternatives, especially in nature and farming. The differences are stark: when one looks for growth in equities, the patterns are iffy and distorted; when one grows a plant from seed, the bounty is straight and true. Stocks are high risk; botany is natural and risk is measured by the abundance or lack of sunlight, nutrients in the soil and avoidance of pestilence.

That's why some regular readers of this blog may have noticed a deviation from schedule over the past months, sometimes postings coming in very late (like this one) or not at all. It is because the author has been busy testing, cultivating and planning. Happily, it has all come together recently.

The transition from following crooked markets to reporting more and more on how Americans actually survive and prosper on their own will continue apace. Since the title of this blog is "Money Daily" an exploration of how one can be assured of one's daily "bread" - without "assistance" from brokers or online trading platforms and analytics - it seems appropriate to transition from reportage of the "official" economy to the real economy, the one that avoids taxation and interference as our forefathers would advise, the one that CNBC cannot and thus, does not, acknowledge. the one that forms the backbone of society and commerce.

You want "Money, Daily?" Buy a few chickens and sell the eggs. It's a start.

As of this writing, futures are tanking. Could the trend of stocks being up every Friday encounter a glitch, a crack in the fraud facade?

More on Monday.

Dow 13,485.97, +72.46(0.54%)
NASDAQ 3,136.60, +42.90(1.37%)
S&P 500 1,447.15, +13.83(0.96%)
NYSE Composite 8,303.74, 82.44 (1.06%)
ASDAQ Volume 1,473,257,750
NYSE Volume 2,766,946,250
Combined NYSE & NASDAQ Advance - Decline: 4033-1408
Combined NYSE & NASDAQ New highs - New lows: 221-28

Wednesday, September 26, 2012

Another Leg down for Stocks; BTFD or Correction Coming?

As a fllow-up to Tuesday's dip into the red, stocks could not forge into positive territory on Wednesday, as the NASDAQ suffered its first three-day losing streak since August 2nd, and the other major averages fell in unison.

Losses were not deep, but steady throughout the afternoon session, closing near the lows. Topping concerns was renewed tension in Europe where protests in Spain overnight and in Greece during the day turned violent.

In Madrid, youths turned out in large numbers to protest parliament's ongoing forays into austerity and to voice anger of the 50% unemployment rate plaguing Spanish youth. Police beat protesters with batons and scores of arrests occurred.

Greece's protests were union organized, as many as 200,000 people from the largest public and private unions marched through the capitol. The demonstration was largely peaceful until anarchists began throwing molotov cocktails at police and media stations. Police responded with tear gas and pepper spray.

By comparison, markets were less jittery in the US as compared to Europe, where Spanish stocks slid by more than three percent and the majority of developed nations' bourses suffered losses of between 1.5 and 2.5 percent.

Commodities were also hit, with gold down sharply and oil closing below $90 per barrel for the first time in more than two months. Silver, which slipped nearly one percent in early trading, rebounded to finish the day close to unchanged.

Losses in risk assets prompted questioning over whether the Fed's new QEternity policy would be effective in boosting or maintaining asset prices in the near term or whether the global economies might be sinking further into a condition of malaise and ill-investment. Some analysts saw the pull-back as technical in nature; others thought a correction was overdue and about to commence.

That left traders in a quandary over where to move next: either out of stocks and back into bonds, or, to stay invested in equities.

Sadly, most people being sheeple, risk assets such as stocks are likely to remain in favor until a more robust, sustained devaluation takes place. Such a scenario could very well play out within the next two weeks. The third quarter is quickly drawing to a close, though the overall strength or weakness of the US economy cannot be measured accurately by the stock market.

Anecdotally, new home sales failed to meet expectations, another cause for concern on Wall street.

Hey, it's only money.

Dow 13,413.51, -44.04 (0.33%)
NASDAQ 3,093.70, -24.03 (0.77%)
S&P 500 1,433.32, -8.27 (0.57%)
NYSE Composite 8,221.75, -53.03 (0.64%)
NASDAQ Volume 1,725,565,750
NYSE Volume 3,535,526,250
Combined NYSE & NASDAQ Advance - Decline: 2145-3341
Combined NYSE & NASDAQ New highs - New lows: 136-48
WTI crude oil: 89.98, -1.39
Gold: 1,753.60, -12.80
Silver: 33.94, -0.01

Tuesday, September 25, 2012

Stocks Fall; Firstrade Securites Ill-Advised as Brokerage

Just after noon, stocks did an about-face and headed into negative territory, with losses accelerating into the close.

There was no real catalyst for the event, except for the possible realization that stocks have been trading at nose-bleed levels for months, the entire global financial condition is shaky at best and a complete joke of fiat money and debt piled on top of debt which will never be repaid.

There's a reason individual investors have fled from the stok market in droves over the past few years. In fact, there are multiple reasons, starting with the crash of 2008, which engendered problems that still have not been resolved. There's the flash crash, HFTs front-running every market order, other insider unscrupulous trading activity, the fact that no financial executive has even been indicted for crimes and probably never will be.

It is the same song and dance sen here nearly daily over the past five years and it's gotten to the point at which it is almost not worth the time to publish. There's a 101-point loss on the Dow today. There will be a 150-point gain tomorrow.

None of it makes any sense until one realizes that the game is rigged and completely out of control. The scrounging and skimming of other people's money is not going to end until regular people stand up and take action. Not demand action from their elected officials, because they're part of the problem, but take matters into one's own hands, like they have in Iceland, soon to come in Greece and shortly thereafter in Spain and Italy.

The US will get around to it last of all, if ever, because the living is good here in the states, no matter how bad the economy gets. There's always another way. The stock market is a road to nowhere for you, your money and your life.

Trading in the current climate is extremely risky and likely to end in disaster for anyone, even those with intimate knowledge of the depth of the crisis, the inner despair of Wall Street and the moaning from Main Street. Better to buy land, gold, silver, live off land you own (or, considering the state of real estate taxes, rent from the government) and make your own way as best as possible.

Dow 13,457.55, -101.37 (0.75%)
Nasdaq 3,117.73, -43.05 (1.36%)
S&P 500 1,441.59, -15.30 (1.05%)
NYSE Composite 8,274.77 -81.79(0.98%)
NYSE Volume 3,677,164,500
Nasdaq Volume 1,979,931,000
Combined NYSE & NASDAQ Advance - Decline: 1507-4082
Combined NYSE & NASDAQ New highs - New lows: 326-35
WTI crude oil: 91.37, -0.56
Gold: 1,766.40, +1.80
Silver: 33.95, -0.04

Monday, September 24, 2012

Stocks Fall for 16th Monday in Last 17; Riots Shutter Foxconn Plant

Seriously, folks, this is getting old.

Major US averages fell for the 16th time in the last 17 Mondays.

This is the new regime. Stocks always go down on Mondays and up on Fridays. They trade in extremely narrow ranges with little to no volatility. Anybody making open orders is immediately raped by HFTs and only insiders win. There is no volume (actually today's volume on the NYSE was in the range from pathetic to morose).

There was actually some positive news on the day. According to a Sunday Times article, Goldman Sachs (GS) is planning to lay off as many as 100 partners in the immediate future. The firm denied the allegations, saying that the changes had been long-planned and many of the departures are due to retirements. No matter the case, it's always good to hear that some of the tentacles of the "giant squid" are being shorn off.

A huge riot of some 5000 workers forced the shutdown of a huge Foxconn facility in Taiyuan, China. The facility reportedly employs 79,000 workers and manufactures the Apple iPhone and other electronic devices for companies such as Dell and Hewlett-Packard.

The price of crude oil fell again on Monday, causing speculation that the Fed's new bond purchase program, otherwise known as QEternity, is not going to be effective in creating jobs or strengthening the sagging US and global economies.

Business as usual.

Dow 13,558.92, -20.55 (0.15%)
NASDAQ 3,160.78, -19.18 (0.60%)
S&P 500 1,456.89, -3.26 (0.22%)
NYSE Composite 8,356.56, -20.95 (0.25%)
NASDAQ Volume 1,706,535,750
NYSE Volume 2,992,098,250
Combined NYSE & NASDAQ Advance - Decline: 2337-3175
Combined NYSE & NASDAQ New highs - New lows: 307-27
WTI crude oil: 91.93, -0.96
Gold: 1,764.60, -13.40
Silver: 33.98, -0.65

Thursday, September 20, 2012

Initial Claims, Leading Indicators Disappoint; Investors Don't Care

Initial unemployment claims and the Conference Board's Index of Leading Economic Indicators both showed disappointing results but investors (those few left) didn't seem to care.

The number of people looking for jobs fell 3,000 from last week, with 382,000 new filers. Leading indicators were down 0.1 percent in August after rising 0.5 percent in July and dropping 0.5 percent in June.

Stocks traded lower in the morning, but quickly rebounded to unchanged, where they remained range-bound the remainder of the session.

It was another low-volume fiasco, brought to you by bankers who can't balance their books and journalists who can scarcely string together two cogent sentences.

Markets, especially those in the US, are so woefully correlated to the macro trade that it would be funny if it weren't so pathetic. Since fall of 2008, trading has been conducted on rumor, innuendo and the latest efforts by the Federal Reserve to "revive" the economy, even though their efforts have been directed almost entirely at rescuing failed financial institutions.

The Fed has thrown more than $20 trillion at the problems which first surfaced with sub-prime lending, but have since infected institutions and sovereign governments globally. Their efforts have been largely futile, wasteful and unfriendly to savers, but there seems to be no other way to keep the world's economic mess going other than to make frequent use of easing, by sopping up debt nobody wants because it is either eminently non-collateralized, below par or not redeemable for anything approaching fair value.

Global markets continue to plod along, nations continue to spend beyond their means and Wall Street thinks it's wonderful.

Just play along.

Dow 13,596.93 18.97(0.14%)
NASDAQ 3,175.96 6.66 (0.21%)
S&P 500 1,460.26 0.79 (0.05%)
NYSE Compos... 8,373.06 27.43 (0.33%)
NASDAQ Volume 1,789,587,250
NYSE Volume 3,372,348,500
Combined NYSE & NASDAQ Advance - Decline: 2132-3369
Combined NYSE & NASDAQ New highs - New lows: 225-35
WTI crude oil: 91.87, -0.11
Gold: 1,770.20, -1.50
Silver: 34.68, -0.09

Wednesday, September 19, 2012

BOJ Eases; Housing a Little Better; Oil Takes Another Hit

OK, it's getting a little stupid with the incessant chorus of monetization of government (and bank debt).

Today, the Bank of Japan (BOJ) joined in, announcing something along the lines of a couple quadrillion yen to be added to liquidity over the next six to eight months. That may not be correct, but the numbers were large, the editor is too tired from cutting down dead limbs (from actual trees), and the time period is rather irrelevant, since the BOJ has been doing this kind of thing for 20-odd years, with obvious effect: keeping the Japanese economy mired in a semi-permanent state alternating between inflation and depression.

Markets took the news in stride, as usual, bounced around a bit, eventually ending only slightly higher on low volume. That's the story for now, and, while it doesn't change much, some day it will. In the meantime, we're taking our own advice and buying land, seeds (tomatoes, tobacco, broccoli, etc.), silver and maybe some working firearms.

There was what might be called "encouraging" news on the housing front. Housing starts (officially, a shovel in the ground or a stake being placed on a lot by a surveyor) came in at 750K in August, but that was below forecast, though up from the July figure of 733K, which was revised downward from 746K, so, expect the August figures to be revised lower as well, for a net gain of, well, who knows?

Existing home sales for August came in at an annual run-rate of 4.82 million, up from an unrevised 4.47 million in July and well ahead of forecasts. That was the best of the news, because August building permits, viewed as an indicator of current demand, fell from 812K in July to 803K, putting something of a damper on the "animal spirits" which keep calling the bottom in the housing market month after month.

Is this the bottom? Maybe, though that depends on perspective and how far out you wish to project. Give housing another four years of ZIRP, massive MBS buying and monetization of the federal debt and see where we are then.

Even better news came from the oil commodity complex, where the price of crude took another massive hit. There's no telling where the selling is coming from, or why, though it certainly seems fishy given the closeness to the general election - just six short weeks away - and the inherently inflationary effect of Bernanke's QEternity, but, it's welcome relief for drivers in the US, at least.

Dow 13,577.96, +13.32(0.10%)
NASDAQ 3,182.62, +4.82(0.15%)
S&P 5001,461.05, +1.73 (0.12%)
NYSE Composite 8,400.31, +12.87 (0.15%)
NASDAQ Volume 1,826,526,125
NYSE Volume 3,409,506,250
Combined NYSE & NASDAQ Advance - Decline: 2914-2500
Combined NYSE & NASDAQ New highs - New lows: 315-28
WTI crude oil: 91.98, -3.31
Gold: 1,771.70, +0.50
Silver: 34.59, -0.13

Tuesday, September 18, 2012

With Everything Priced In, Trading Remains Sluggish

Well, absolutely everything from QE3 to the ECB's bond-buying program to Midwest drought to the presidential election has been completely priced into stocks, so they have nowhere to go at present.

The NASDAQ traded in about an eight-point range, a fivepoint swing top to bottom as all the S&P could muster, while the Dow - the only index higher on the session - was range-bound by 64 points. Volume, not unexpectedly, was light and volatility was nowhere to be found.

This, of course, is the direct result of government intervention into what used to be free markets, central planning of the economy and socialization of losses by financial firms.

It goes without saying that it is tough to make money in such an environment. Stocks are poised either near all-time highs or, as in the case of the NASDAQ, multi-year highs. The level of complacency, knowing that the Fed can and will step in at any sign of weakness, is almost unbearably stupid.

Since Fed chairman Ben Bernanke called for $40 billion in monthly MBS purchases without placing a duration limit, the major averages have more or less flat-lined.

That's about the whole story for today. Nothing much happened.

There was one bit of good news: oil fell substantially for the second straight day. If the current move downward (oil prices usually drop after Labor Day) is sustained, within a month, drivers should begin to see lower prices at the pump.

Dow 13,564.64, -11.54(0.09%)
NASDAQ 3,177.80, -0.87 (0.03%)
S&P 500 1,459.32, -1.87 (0.13%)
NYSE Composite 8,387.52, -21.45 (0.26%)
NASDAQ Volume 1,672,492,500
NYSE Volume 3,350,519,000
Combined NYSE & NASDAQ Advance - Decline: 2560-2973
Combined NYSE & NASDAQ New highs - New lows: 191-20
WTI crude oil: 95.29, -1.33
Gold: 1,771.20, +0.60
Silver: 34.72, +0.35

Monday, September 17, 2012

Markets Close Down 15th Monday Out of Last 16

Despite the aggressive easing action by the Fed last week, today's session was marked by broad-based selling on low volume, the 15th consecutive Monday of the last 16 in which the markets turned lower for the day.

It is one of the odder trends in the markets these days, but is most likely tied to HFTs and the macro-analysis upon which markets currently depend. There was once a time in which everything didn't fall or rise in unison, perfectly predictable, dependent upon headlines, but that has been the regime - for the most part - since the financial crisis of 2008. Nothing's been repaired and market participants merely follow the herd, which, truth be told, has been a most profitable trade since March 2009, with stocks close to all-time or multi year highs.

Another oddity carried forth today was how the NYSE Composite took on roughly twice the water than the other indices, on a percentage basis. Apple (AAPL) kept the NASDAQ and S&P at relatively minimal losses, while the Dow Industrials were boosted by consumer stocks (Coca-Cola (KO) and McDonald's (MCD)), big phrama names, Merck (MRK) and Phizer (PFE), all of which bucked the trend and closed on the upside.

All of the major indices finished well off their lows, with a short-covering spike sending all off what were the lows of the day, in the final hour of trading.

There was little in the way of economic data - as if the markets would have cared anyway - except New York's Empire Manufacturing Index, which fell to -10.4, its lowest level since November, 2010. It followed the recent trend of other Fed regional indices, sporting sub-par results. With that in mind, it's little wonder that the Fed decided last week to go all in on what some are calling QE-infinity.

Financial markets are a complete farce now, and have been pretty much since the 2008 crash. The Federal Reserve's insistence to sop up the remains of old and recently-issued MBS truly points up the dilemma faced by central banks and sovereign government entities.

With the Fed becoming the world's largest landlord-by-proxy, the rally cry of "free houses for everyone!" has taken on new and even more cynical meaning.

In a move that can only be captioned by the phrase, "well, it's about time," crude oil skidded more than $3.00 before recovering slightly.

Dow 13,553.10, -40.27 (0.30%)
NASDAQ 3,178.67, -8.46 (0.27%)
S&P 500 1,461.19, -4.58 (0.31%)
NYSE Composite 8,408.92, -49.96 (0.59%)
NASDAQ Volume 1,428,619,250
NYSE Volume 3,135,453,500
Combined NYSE & NASDAQ Advance - Decline: 1883-3624
Combined NYSE & NASDAQ New highs - New lows: 228-26
WTI crude oil: 96.62, -2.38
Gold: 1,770.60, -2.10
Silver: 34.37, -0.29

Saturday, September 15, 2012

It's Not Just Stocks; Americans Are Rising Again

If one were to look just the US stock markets, the assumption would likely be that all is well and good with the US economy.

The major averages are at multi-year highs, with the Dow less than 600 points from its all-time high (Oct. 9, 2007: 14,164.53 close) and the S&P 500 a mere 100 points away from its all-time closing high set on October 9, 2007, at 1565.15.

A peek under the hood, so to speak, would reveal a different reality, with unemployment above eight percent for nearly four years running, massive stimulus programs by the government and the Federal Reserve boosting stock prices but sparking inflation and leaving middle class America and small business seething through high gas prices, slack demand, virtually no job creation, a shrinking work force and record numbers of Americans receiving government assistance through food stamps, welfare and a variety of other programs.

The impression that all is apparently just fine is touted by the media to a largely unsuspecting public, though that aspect of life in America is changing. More and more people distrust government at all levels, actually understanding that the Federal Reserve is willfully destroying the value of the US dollar, engaging in all manner of underground economics, from backyard gardens to unreported side job incomes, leaving the "system" to fend for itself without public support.

Government, especially at the federal level, continues to parade about their so-called "expertise," knowing what's "good for the American people" while doing little to nothing to remedy the conditions which plague middle-to-low income families. The rapidity by which independent thinkers are withdrawing the consent to be governed is startling when one examines Americans up close.

While the economists and analysts look at largely massaged, incorrect and inconclusive numbers on jobs, spending, inflation, productivity and income, they entirely miss the now massive, unreported, burgeoning economics taking place in small towns and large cites across the expanse of the continent. Certainly, there are minions still without knowledge or understanding of the extent of the financial crisis - now nearly four years old and running - still willing to rely on government help, but a growing number of people have come to the realization that government today exists only to self-perpetuate and serve the needs of a greedy, cumbersome system of enormous public corporations and government regulations designed to stifle competition, crush creativity and retard personal growth.

Such people are increasingly taking matters into their own hands, purposely defaulting on fraudulent mortgage loans, making do with less, and living more off the land than having to depend on the corporate food chain of genetically-modified foods, products stuffed with hormones, sugars and high fructose corn syrup that are unhealthy but still promoted by government officials.

These people are eating better, more nutritious, healthier foods, avoiding government regulations in quiet protest and operating in a largely cash economy that will continue to grow and flourish because it is too big, too diverse and too pervasive for regulators and prosecutors to effectively control.

From the government's perspective, such actions by individuals and families in the private sector are viewed as counter-productive to their aim of the perfect welfare state. In the minds of the actual practitioners of this "new economy" it is a necessity of survival. They are finding like-minded individuals in their friends and neighbors, spreading the word to others who seek to escape the all-seeing eyes and ears of a tyrannical elite, and prospering while the government stumbles, bumbles and eventually will self-destruct.

When the invisible secondary economy becomes so large that it mirrors the "official "GDP," as occurred during the oppressive days of prohibition, radical change will certainly follow, as it did then. The people shall rise, not all as one, but in various pockets of defiance, from urban strongholds to rural outliers. For many, especially those which have not seen the light, chaos will prevail. For those who have been silently proactive in the management of their livelihoods and self-sufficiency, it shall be a time of prosperity and freedom.

America has been and will be a country based upon principles of personal liberty and economic freedom. If the government is ill-equipped to support these values or even to go so far as to attempt to deprive citizens of their rights under the constitution and other prevailing, fair, tested laws, then the people will withdraw their consent and forge a new era irrespective of government policy and procedure.

The process of reformation and recovery from a top-down, repressive, centrally-planned society and economy to one from which the nation was formed: individual, self-sustaining, resourceful and fiercely independent, will take years, even decades to come to fruition, but come it will, come it must.

American people of good conscience and knowledge have had nearly enough from a government that refuses to protect and promote the interests of its citizens. While a day of reckoning may never be realized, small steps forward by individuals and like-minded groups are already well underway and will continue until the jackals, thieves and miscreants who call themselves our "leaders" are swept away by a tidal wave of public discontent.

America - at least its spirit - will forever live in the hearts and minds of true patriots who will always choose to fight rather than to take flight.

Those who wish to limit freedoms and curtail the liberties which made the nation the greatest in the history of mankind will find their tenure short-lived and their efforts fruitless.

This post was inspired by a true American.

Dow 13,593.37, +53.51 (0.40%)
NASDAQ 3,183.95. +28.12 (0.89%)
S&P 500 1,465.77, +5.78 (0.40%)
NYSE Composite 8,458.88, +51.85 (0.62%)
NASDAQ Volume 2,028,686,500
NYSE Volume 5,067,050,000
Combined NYSE & NASDAQ Advance - Decline: 3749-1817
Combined NYSE & NASDAQ New highs - New lows: 749-31 (absurd)
WTI crude oil: 99.00, +3.78
Gold: 1,772.70, +31.50
Silver: 34.66, -0.12

Thursday, September 13, 2012

Ben Bernanke, Bankers' Friend; QE3 Sends Stocks Screaming Higher, Oil, Gold, Silver Rally

After the German Constitutional Court OK'd the ECB's ESM (love those acronyms!), Thursday was set up for a real bazooka blast of fresh money-printing by Fed Chairman Ben Bernanke.

And, of course, the chairman did not disappoint, announcing an unlimited bond buying scheme, whereby the Federal Reserve would commit to buying $40 billion per month of MBS (Mortgage-Backed Securities) for a time period that the chairman left open-ended.

According to the FOMC statement: "If the outlook for the labor market does not improve substantially, the committee will continue its purchase of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability..."

The FOMC statement also extended ZIRP (Zero Interest Rate Policy) through mid-2015, another easing which mostly benefits banks, which can borrow at 0-1/4%.

The Fed's move was - and will be - huge, providing liquidity and a lifeline to the banks by sopping up their horrendous MBS, which are almost all underwater, spoiled or otherwise non-performing.

A move of such scope cannot be underestimated for its overall effects to the larger economy, not only in the US, but globally. The world is already awash in US dollars, and these policy actions only exacerbate that situation. In response, the Euro has galloped ahead, trading in excess of 1.31 to the dollar.

Markets all popped, with the Dow at its highest level since autumn of 2007 and now within shouting distance of its all time high, along with the S&P.

It is absolutely amazing that stocks can be artificially propped up due to actions from the public sector, but there is a downside to consumers in the form of higher prices, especially in food and fuel. Gasoline at the pump is nearing $4.00 per gallon nationwide. The average price of a gallon of unleaded regular is now $3.87.

The Fed believes that even with their massively-inflationary policies that inflation will remain below two percent. They must be dreaming, because the price of oil, tied directly to gas and home heating fuel, continues to rise and should continue to do so in the months ahead.

That will effect all consumer prices on everything that needs to be shipped, trucked or transported, which is just about everything except food you grow in your own back yard and items you make at home (depending on where you buy raw materials).

Good-bye Mitt Romney; hello second term for Obama. The election, thanks to the Fed, should be a slam-dunk for president Obama and likely will result in congress continuing to be split, with Republicans ruling the House and Democrats the Senate.

Great. More deadlock from the pols, higher prices for everything, more riches for bankers, a weaker dollar (in just the past two weeks, that European vacation rose in price about 10%) and no way to save unless you buy hard assets, gold and silver.

The status quo remains print, print, and print some more. The middle class is being squeezed out of existence. The big hope is that the Fed will sop up so much of the horrid MBS out there that they will bankrupt themselves and someday the US will return to sound money, though that scenario is probably a few years away.

In the meantime, enjoy. Spend. The Fed and the government have your back with unlimited public spending, a new, higher federal debt ceiling (coming soon and monetized by the Fed) and fiat money out the wazoo.

It's the grandest clusterf--k of monetary policy and make-believe debt-funding in the history of the world.

Dow 13,539.86, +206.51 (1.55%)
NASDAQ 3,155.83. +41.51 (1.33%)
S&P 500 1,459.99. +23.43 (1.63%)
NYSE Composite 8,407.03, +139.71 (1.69%)
NASDAQ Volume 1,884,013,625.00
NYSE Volume 4,616,279,500
Combined NYSE & NASDAQ Advance - Decline: 4230-1321
Combined NYSE & NASDAQ New highs - New lows: 598-27 (flashing red light extreme)
WTI crude oil: 98.31, +1.30
Gold: 1,772.10, +38.40
Silver: 34.78, +1.49

Wednesday, September 12, 2012

Germany Goes All In; Wall St. Waits on the Fed

Today was Europe's turn. Tomorrow will be America's.

Before most Americans were even awake, Europeans were rejoicing the German Constitutional Court's ruling that the ESM (Emergency Stabilization Fund), used to bail out failing sovereign governments was, according to German law, constitutional, and the ECB could go forward with its plans to bail out Greece and Portugal, and, possibly Spain and Italy, if need be.

The court did add one stipulation, however, that the German portion of the funding would have to be approved by parliament if there wer any increases to the size of the fund.

Thus, Europe and the Euro were saved, once again, by the alchemy of Ponzi-economics, for now.

The ESM, along with other emergency funding mechanisms from the ECB, should "stabilize" the Eurozone for another year to 18 months. Then, well, who knows?


In the US, markets hung close to the flat line in anticipation of the FOMC interest rate policy announcement, where the Federal Reserve may or may not announce another round of Quantitative Easing, better known as QE, and, in this case, since it would be the third (or fourth, if you count operation twist) round of easing, QE3.

Three cheers.

The announcement will be delivered around 2:15 pm EDT on Thursday, unless, of course, like the German court ruling, it is leaked to the press first.

Some day, investors will want to know about individual stocks, but not these days.

Dow 13,333.35, +9.99(0.07%)
NASDAQ 3,114.31, +9.78(0.32%)
S&P 500 1,436.56, +3.00(0.21%)
NYSE Composite 8,267.16, +21.01(0.25%)
NASDAQ Volume 1,680,020,000
NYSE Volume 3,555,939,250
Combined NYSE & NASDAQ Advance - Decline: 3429-2094
Combined NYSE & NASDAQ New highs - New lows: 336-30
WTI crude oil: 97.01, -0.16
Gold: 1,733.70, -1.20
Silver: 33.29, 10.27

Tuesday, September 11, 2012

Wait for the Fed Again (Tired Refrain)

For whatever reason, stocks were broadly higher the day before two major events: the German Constitutional court ruling on the legality of the ESF and funding of various debtor nations, and the FOMC policy announcement which will be announced around 2:00 pm EDT on Wednesday. At the conclusion of the meeting, Fed chairman Ben Bernanke will either announce a new round of QE or he won't, thus ending all speculation.

The chances are good that the German high court will rule the ESF constitutional (since it has already been widely leaked that they will do so), though skepticism remains on Bernanke's move. Market reaction will be swift and severe, either way, so it's a somewhat fruitless endeavor to speculate so close to the event.

Sadly, but truly, this is what 21st century investing has become: betting on policy actions by central banks and high courts. One longs for the days when fundamental analysis actually could result in the success or failure of a trade.

That's what German pragmatism and socialist central planning will get you. A mixed bag in a crooked, convoluted, highly controlled and coordinated market system on a road to nowhere.

Yuck. (It seems one hears that opinion more and more these days.)

Dow 13,323.36, +69.07(0.52%)
NASDAQ 3,104.53, +0.50(0.02%)
S&P 500 1,433.56, +4.48(0.31%)
NYSE Composite 8,246.15, +53.75(0.66%)
NASDAQ Volume 1,596,002,750
NYSE Volume 3,518,323,250
Combined NYSE & NASDAQ Advance - Decline: 3530-1983
Combined NYSE & NASDAQ New highs - New lows: 290-38
WTI crude oil: 97.17, +0.63
Gold: 1,734.90, +3.10
Silver: 33.57, -0.07

Monday, September 10, 2012

Stocks Drop on Fears of NO QE by Fed

Nothing but headlines and rumors are moving the markets these days - and, incidentally, it's Monday, so stocks must go down - and, since Europe's already been sated by ECB president Mario Draghi's new proposal to bail out all sovereign nations in need by purchasing one, two and three year bond issues in exchange for said nations' acceptance of "conditions," all eyes have turned to the two-day FOMC meeting at which Chairman Ben Bernanke is supposed to announce his own version of bond-buying (AKA, QE3).

But, as with all things Ponzi-oriented and subject to whims, official data and sentiment - to say nothing of the upcoming presidential election - speculators, insiders, hedge fund managers and other market participants are a little nervous about what's to come on Wednesday afternoon, when the FOMC will surely announce no chance in policy, keeping rates at zero, and after that...

Chairman Bernanke may well hint at new stimulative measures or actually set a date for a plan to proceed, or, he may weigh all the factors, including Friday's uninspired non-farm payroll data, and do nothing (which would be, historically speaking, the correct path).

If that's the case - and that's what had investors worried in the final hour of trade today - then expect a sharp pull-back from the currently-inflated levels on the major indices. Additionally, the German high court is set to rule, earlier in the day on Wednesday, on the constitutionality of the ESM, and that could be an even bigger deal.

Some 70% or more of the German populace is opposed to the ESM, the funding mechanism that is supposed to - just like all other failed plans - save the Euro, because the bulk of the fund would be bourn by Germany and the good people of that country who pay taxes, which are already viewed as too high. The thought of more taxation in Germany, one of the highest-taxed nations in the world, is unpalatable to most, but taxpayers, alas, do not have a vote. The ruling will come at about the time markets open in the US, setting up for what could be a wicked roller coaster ride.

Thus, there's enough nervousness on Wall Street to make even the coolest of operators break into a cold sweat these days, as uncertainty exists at all levels of economies globally and in the political world.

Today's double digit losses on the major exchanges could be nothing more than profit-taking, or a precursor to some terrible future without government stimulus on both the European and American continents.

How sad. Brokers and dealers might actually have to do some fundamental analysis for a change instead of depending on round after round of money printing to keep the stock markets at nose-bleed levels. Time will tell, and the time is nigh.

Dow 13,254.29, -52.35 (0.39%)
NASDAQ 3,104.02, -32.40 (1.03%)
S&P 500 1,429.08, -8.84 (0.61%)
NYSE Composite 8,192.40, -42.11 (0.51%)
NASDAQ Volume 1,578,686,000
NYSE Volume 3,213,290,000
Combined NYSE & NASDAQ Advance - Decline: 2228-3284
Combined NYSE & NASDAQ New highs - New lows: 332-38
WTI crude oil: 96.54, +0.12
Gold: 1,731.80, -8.70
Silver: 33.63, -0.06

Friday, September 7, 2012

August Non-Farm Payrolls Miss Flatlines Stocks

The US economy showed another sign of sluggishness, as August Non-farm Payrolls rose less than expected, gaining 96,000 net new jobs for the month, well below consensus estimates of 125,000.

Additionally, June and July data sets were revised downward by a combined 41,000. June payrolls were just 45,000, while the number in July was revised down to 141,000.

The official jobless rate fell from 8.3% to 8.1%, as labor force participation fell to its lowest level in decades, at 63.5%.

The poor showing for the labor market was seen as a blow to president Obama's re-election bid, and also as cause for the Fed supplying more stimulus when the FOMC meets next week.

Volume more or less returned to the doldrums, following the massive ramp-up Thursday, following the unveiling of the ECB's new bond purchase program.

Stocks tended to just meander around the flat line, with the odd exception of the NYSE Composite, which gapped up at the open and stayed in a tight range all session long.

It's somewhat a sad commentary on markets that they are so well-coordinated in response to news, specifically that this or that central bank is making money easier for bankers to borrow at little to no interest, all the while the general public scratching out a living without any mechanism for saving.

Outward appearances may be deceiving. This kind of controlled economics seldom works out well in the long run.

Precious metals may be telling the markets something. Gold and silver soared again today and are at multi-month highs, generally a sign that economic or geopolitical conditions are strained and risk assets not to be trusted, though one could hardly suspect that anything evil may come the way for stocks, as well as they have performed this year.

Dow 13,306.64, +14.64(0.11%)
Nasdaq 3,136.42, +0.61(0.02%)
S&P 500 1,437.92, +5.80(0.40%)
NYSE Composite 8,233.98, +73.42(0.90%)
NYSE Volume 3,627,325,750
Nasdaq Volume 1,694,756,120
Combined NYSE & NASDAQ Advance - Decline: 3490-1997
Combined NYSE & NASDAQ New highs - New lows: 449-40 (extreme)
WTI crude oil: 96.42, +0.89
Gold: 1,740.50, +34.90
Silver: 33.69, +1.02

Thursday, September 6, 2012

Draghi Delivers Win-Win for Europe, Stocks

ECB president Mario Draghi pleased just about everyone when he unveiled the latest bond-purchasing scheme by the European Central Bank at a news conference early this morning. Stocks rose across Europe and the Americas with the NASDAQ reaching 11 1/2 year highs.

Portions of the new ECB bond purchase program, which is designed to purchase sovereign bonds with maturities of 1, 2, and 3 years, were purposely leaked to the press in the days and weeks prior to the official announcement, which came after the ECB's rate policy meeting (kept the official bank lending rate at 0.75%), during afternoon trading on European bourses and prior to the open of trading in New York.

The plan, called by Draghi, Outright Monetary Transactions (OMT) rests on five main pillars: 1) Strict conditionality will be applied to bond purchases 2) There will be unlimited purchases of bonds with a maturity of one to three years 3) The ECB will not have seniority 4) All transactions will be 'sterilized' 5) Purchases will be reported monthly.

Countries wishing to participate (notably Spain and Italy) will have to make a formal application and adhere to conditions, mostly in the form of austerity measures, something at which many governments have balked.

While the stock markets advanced broadly, the S&P reaching a four-year high there are some land-mines over which the ECB will have to traverse in order to make the program a success.

First, there is the matter of legality, upon which the German high court will rule on Wednesday, September 12. The court is reviewing previous bond-buying programs by the ECB, such as the ESM, to determine if such plans comply the rigors of the German constitution. If the court decides against such plans, everything in Europe will be thrown into chaos, as Germany is the major funder of bailout programs.

The matter of nations applying for funding is another sticking point. Spain and Italy are in fiscal crises, but the political leaders are wary of conditionality, submitting their government to severe austerity measures, such as the recently-proposed six-day work week for Greeks. Additionally, sticking to the conditions ofthe loans is often difficult if not impossible, though the OMT specifically says that bond purchases will be curtailed if conditions are not met.

with the ECB now in the Fed's arena of massive money printing, what lies ahead for the US and global economies is next week's FOMC meeting, at which it is widely believed Fed chairman Ben Bernanke will unveil some new liquidity program of his own, commonly called QE3, though recent economic data, such as today's August ADP employment report and the ISM Services data would seem to indicate that further easing by the Fed is not warranted nor wise at this juncture.

Thus, positive economic data, a recovering economy and anything outside the stock market viewed as positive to growth will be viewed by Wall Street as an impediment to more easy money, likely causing a sell-off in equities.

Tomorrow's non-farm payroll report for August is the linchpin to Fed action. Anything over 150,000 net new jobs may cause the Fed to hold back from further easing. There's also widespread belief that the Fed will be reluctant to move so close to the US presidential elections, not wishing to be perceived as a political entity.

Next week is shaping up to be epic, one way or the other.

Dow 13,292.00, +244.52 (1.87%)
NASDAQ 3,135.81, +66.54 (2.17%)
S&P 500 1,432.12, +28.68 (2.04%)
NYSE Composite 8,160.40, +168.39 (2.11%)
NASDAQ Volume 1,883,115,000
NYSE Volume 3,919,524,250
Combined NYSE & NASDAQ Advance - Decline: 4360-1203
Combined NYSE & NASDAQ New highs - New lows: 494-39
WTI crude oil: 95.53, +0.17
Gold: 1,705.60, +11.60
Silver: 32.67, +0.35

Wednesday, September 5, 2012

Nothing Moves in Advance of Draghi's ECB Announcement

Remember those days of late August, when the markets traded in narrow ranges and closed within a tiny fraction of a percentage point on super-low volume?

Today was another one of those days. Stock pickers are waiting for the ECB meeting on Thursday, when president Mario Draghi is supposed to release details of his plan to fund all of the peripheral nations that are broke, bankrupt or about to be.

Last week, everyone waited for the Chairman of the Federal Reserve, Ben Bernanke, to give a speech at Jackson Hole, Wyoming, and signal that the Fed was soon to unleash more free capital into the corrupt, dysfunctional, insolvent banking system.

Now we wait for Draghi. It's a complete disaster unfolding right before our eyes and barely worth commenting upon because Bernanke didn't say anything the markets didn't already know, and, in all likelihood, neither will Draghi. Either that, or he'll do what the Europeans are so good at, making funny noises, promising something for a later date, your basic can-kicking exercise.

The clock is ticking...

Dow 13,047.48, +11.54 (0.09%)
NASDAQ 3,069.27. -5.79 (0.19%)
S&P 500 1,403.44, -1.50 (0.11%)
NYSE Composite 7,992.01, -10.31 (0.13%)
NASDAQ Volume 1,432,807,125
NYSE Volume 2,782,468,000
Combined NYSE & NASDAQ Advance - Decline: 2308-2724
Combined NYSE & NASDAQ New highs - New lows: 274-59
WTI crude oil: 95.36, +0.06
Gold: 1,694.00, -2.00
Silver: 32.33 -0.08

Tuesday, September 4, 2012

Stocks Fail on Stormy Tuesday; The Misinformation Age

Well, it's not Monday, but it is the first day of the workweek, so stocks must go down. And they did, with the exception of the NASDAQ, which went from the worst-performing index to the best in a matter of 40 minutes - from roughly 2:00 pm to 2:40 pm EDT, going from a loss of 10 points to a gain of 15.

The Dow and S%P tagged along somewhat, but that drove the NAZ higher was none other than Apple (AAPL), which recorded almost half of its 9.73-point gain during that time period.

So, why then does CNBC report that the surge in stocks - the Dow was down nearly 115 points at the lows of the day, the NASDAQ off more than 26 - was due to a tweet by PIMCO's Bill Gross, who, mentioning that Mario Draghi, head of the ECB, willingness to offer 1, 2, and 3-year "loans" (bond purchases) to sovereign nations in the Eurozone, was reflationary and that investors should buy GOLD, TIPS AND REAL ASSETS.

Note that Gross did not say "STOCKS," though CNBC, the masters of misinformation, wishes the assembled masses of hoe viewers would believe that Mr. Gross is a perma-bull, when the exact opposite is true.

Welcome to the age of heightened misinformation.

There was a story today out of Stanford about organic foods not being any better than mass-produced, GMO, pesticide-riddled crap that drives US corporate agribusiness.

Two studies of children consuming organic and conventional diets did find lower levels of pesticide residues in the urine of children on organic diets, though the significance of these findings on child health is unclear, noted the researchers.

I'll take lower levels of pesticides in my urine for $400, Alex.

Just guessing, but could the major contributors to these Stanford researchers possibly be Monsanto and the US Dept. of Agriculture?

Other misinformation predominates what passes for news and journalism these days. For instance, according to the ECB's Mario Draghi, buying 1, 2, and 3-year bonds from sovereign nations does not violate the EU's basic treaty, which forbids such actions... OK. Obama and Romney sound like they differ widely on policies, when both, in fact, are nothing but shills for wealthy individuals and corporations which fund their campaigns. Facebook has lost 50% of market value since its IPO four short months ago, but it's still a solid company.

Trading volume, which was supposed to rebound as soon as all the Wall Street heavy hitters returned after Labor Day, was only a little better today than during July and August. US markets are so thinly-traded that manipulation by a group of well-timed players or even the PPT is easier than ever.

Keep an eye on gold and silver, maybe especially silver, which has exploded over the past three weeks. Gold's being suppressed below $1700, though it seems the central banking cartel cannot hold that level much longer. The Dow fell below 13,000 today, but was pumped back above it, ditto the S&P at 1400. These trades and ranges are due to break down soon.

Today's ISM reading of 49.6 was the third in a row showing contraction, though now, according to Steve Liesman of CNBC. the number to watch is 42.6, which would show contraction for the entire economy. Pure bunk.

Construction spending was off 0.9% in July. That a sizable decline, and why stocks fell out after the two reports at 10:00 am EDT.

Just to refresh one's memory, here's a nifty video of why we're where we are.

Dow 13,035.94, -54.90 (0.42%)
NASDAQ 3,075.06, +8.10 (0.26%)
S&P 500 1,404.94, -1.64 (0.12%)
NYSE Composite 8,002.31, -12.61 (0.16%)
NASDAQ Volume 1,505,270,625
NYSE Volume 3,086,772,250
Combined NYSE & NASDAQ Advance - Decline: 3319-2194
Combined NYSE & NASDAQ New highs - New lows: 288-64
WTI crude oil: 95.30, -1.17
Gold: 1,698.40, +10.80
Silver: 32.41, +0.97